Summer’s double whammy: Brownouts, power rate hike

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POWER consumers will be dealt a double whammy this summer —rotating brownouts and higher electricity rates.

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Luis Miguel Aboitiz, president and chairman of the board of Philippine Independent Power Producers Association (PIPPA), said the power shortage will result in an automatic price increase because of the use of fuel by generating companies.

“I guarantee that there will be a spike [in power rates]because that happens whenever Malampaya shuts down,” Aboitiz said in a briefing in Makati City (Metro Manila).

He added that the cost of electricity will likely go up by P1 per kilowatt-hour (kWh).

“Once the gas plans shift to liquid fuel, there’s around P1 per kilowatt-hour (kWh) automatic increase. If you buy diesel, it is more expensive than [when]you buy gas,” Aboitiz told reporters.

He said the looming power rate increase will not be as bad as in 2013 when Meralco was allowed to raise its rates by P4.15 per kilowatt-hour from December 2013 to March 2014 because the Malampaya plant shut down.

“We’ve got a lower primary cap at the Wholesale Electricity Spot Market (WESM) and a secondary cap,” Aboitiz added.

Lawrence Fernandez, vice president and head of the Utility Economics of Manila Electric Co. (Meralco), said the power rate hike may be around P1 per kWh but the actual increase will depend on the current price of fuel.

Any power rate adjustment will be reflected in consumers’ April to May billing statements.

To mitigate the power shortfall during the hot summer months, Meralco has signed up at least 323 companies for the Interruptible Load Program (ILP).

The ILP encourages heavy electricity consumers such as shopping malls, condominiums and companies to run their own generator sets to ease power demand on the grid.

The participants will be reimbursed by the government for their expenses in using their gensets.

Fernandez said Meralco has started a dry run with the ILP participants, which were divided into two groups.

The first group was asked to activate their gensets from 10 a.m. to 12 noon while the second group will operate their gensets from 1 p.m. to 3 p.m.

“We will have to see the outcome of the dry run. We are already preparing for March,” Fernandez said.

The House of Representatives had estimated a supply shortfall of 782 megawatts (MW) from March to July 2015.

The House passed Joint Resolution 21, which authorizes President Benigno Aquino 3rd to establish additional generating capacity for the Luzon grid through the ILP.

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1 Comment

  1. Congress should have passed a bill granting no tax for new electric facilities. That way businessmen would scramble to build and produce more electricity. This would also bring down prices.